Altria earnings fall short amid lower cigarette sales and competition for nicotine products

WASHINGTON (AP) — Shares of Altria dipped Thursday aft the baccy elephantine reported level net owed to declining cigarettes income and challenging contention for newer products, including flavored nicotine pouches.

The Richmond, Virginia-based institution said fourth-quarter gross slid 2% to $5.8 billion, chiefly driven by little cigaret sales. Tobacco companies person agelong had to negociate shrinking income of their main merchandise category, but Altria executives said cigarettes person been progressively squeezed by the instauration of unauthorized disposable physics cigarettes, which are often cheaper and travel successful effect and candy flavors.

“We person agelong advocated for stronger enforcement against illicit products,” Altria CEO Billy Gifford said Thursday.

The institution reported adjusted nett income of $1.30 per share, falling abbreviated of Wall Street expectations for net per stock of $1.32, according to analysts surveyed by Zachs Investments Research.

Company shares fell much than 2.5% successful greeting trading.

Altria executives updated investors connected the company’s longstanding efforts to diversify the company’s concern into next-generation products, specified arsenic e-cigarettes and nicotine pouches, though the institution is not a marketplace person successful either space.

In December, the Food and Drug Administration officially authorized Altria’s pouch brand, on! Plus, successful respective flavors, including mint and wintergreen. The marque has been disposable for years, but FDA authorization means the products has the agency’s support to stay connected the marketplace and grow nationally.

However, institution results showed the company’s products losing crushed successful the latest quarter. Altria said on! pouches stock of the marketplace shrank to astir 13%, down astir 5 points from the anterior year.

The U.S. marketplace for pouches is dominated by Zyn, the flavored marque from Philip Morris International, which accounts for much than two-thirds of income for the category, according to figures from Nielsen.

Altria executives said they faced pricing contention from Philip Morris successful the latest quarter, including 2-for-1 merchantability promotions for Zyn.

Gifford said Altria plans its ain pricing strategy arsenic it expands its nicotine pouches astatine determination and past nationalist level aboriginal this year.

“Certainly arsenic we present astatine retail we’ll person assorted introductory terms promotions,” helium told investors and analysts Thursday. “We consciousness precise excited astir the differentiation we person and the user feedback.”

Company executives said the institution remains funny successful different alternate baccy products, including e-cigarettes.